Tariffs on classic Ferraris

Let's not forget the compounding damage from decline in the dollar adding to foreign transactions and the now daily hit to retirement fund.

 

I have my first stock shipment of reproduction windows/windshields, including some for vintage Ferraris, since the additional tariff implementations and/or threats in customs right now and once cleared and delivered (hopefully next week ?), I'll be very curious to see how much, if any, real impact they will have on my retail pricing and/or sales in general.

Due to number of manufacturing related material cost increases within a last year or so already added almost 25% to my costs for this shipment, before any potential shipping or tariff increases.

All this might even force me to stop after nearly 30 years of reproducing them as it's becoming constantly less cost-effective with diminishing profit margins, i.e. not worth the efforts.

And before anyone wonders out loud, most of these types of vintage car windows/windshields I've been reproducing, importing & selling nearly 3 decades are or have not been made in US for over 50 years and more than likely, never will be.

 

Well, **** me with a wire brush !

I just received an invoice from my international freight carriers customs brokerage dept and quick comparison to my previous stock replenishment orders (coming from Europe), the entry duties, i.e. tariffs, charged now appear approximately 700% !!! higher (per item) than before.

Fortunately, this was smaller than my previous orders/shipments, but the increase (per each item) seems shocking, to say the least.

OTOH, I haven't calculated the actual impact on my retail pricing yet, but obviously there will be a need for increase if I wish to keep all this sustainable, i.e. make a profit.

I need to quit early and go home to have a drink or two.

 

you may wait 6 month, then it will do down again to normal ( only my 5 cents )

 

Yes, now is not the time to stock up on spec inventory. It’s going to be rocky for people in the midst of a restoration or needing service in the near term though.

 

I had placed an order on manufacturing of everything and received deposits on some long before these idiotic tariffs were implemented and being a man of my word had to honor my commitments to both the manufacturer and buyers, so waiting for 6 months(?) was not an option.
Reneging on one’s word is for ******* and I wasn’t raised to be one.

 

CORRECTION:
It appears my math might’ve been a little off …

OTOH, last night I spoke with a friend who recently sold a customs brokerage business that had been in his wife's family for couple of hundred years, catering mainly to a select few larger scale commercial importers of daily use consumer products not even possible to make here and he explained some of the details & their direct consumer impacts to me, but also said they’re now very glad to be out that business due to the utter chaos & uncertainties all this has created.

 

What do you mean wait 6 months. I thought all this tariff stuff changes on a weekly basis.

 

I received some parts from Italy last week Friday and the tariff charge was exactly 20% of the invoice. Some metal parts, some leather.

Do I like it? No. But if I had to pay sales tax in the US where I live it would be 7.5% (LA County would be 9.5%). So its about double the additional tax to import.

IF the tariff were zero, I would be saving 7.5% than buying it in the US. But there should be some tax like there is an anything you buy in the US. That would be fair and "apples to apples". Some kind of balance is needed but it should also not be "zero" if things were equal.

 

In my business with goods coming out of Asia the problem was everyone holding shipments or storing goods in Canada. I have heard similar reports out of Italy where goods are just stacking up waiting. US warehouses are full. The recent change was an effort to get these containers moving again. Once that happens I would expect some stability for at least 3 months where hopefully, lower tariffs are coming in a negotiated reciprocal action. But its hard to say what's the final outcome. My guess is something like 10% but its a guess. The EU is a different story but it might end up similar to what's going on with US / Asia now as a model.

In theory the increase in price of parts for restoration should make restored cars a bit higher in price. Anyone buying an unrestored car will have to factor in higher parts costs. That might depress unrestored car prices to make it worth while.

When its all said and done, I don't think it will have much long term effect. The free market will decide and factor in tariffs.

 

Be aware that in virtually every state you are required by law to self report sales, use, or consumer taxes and pay the applicable tax. The state department of taxation or revenue receives copies of transport and/or customs summary forms and they’ll monitor your imports and subsequent filings for these taxes. In the event you get on their radar for not filing they’ll peruse taxes plus all applicable penalties. Death and taxes...

 

Right or wrong, here's my understanding:
Paying Import Duties/Tariffs doesn't cancel the need to pay Sales & Use Taxes or vice versa.
Duties/Tariffs are collected by/for federal government while Sales & Use Taxes are collected by/for state & local governments.
You, me & everyone else is expected to file/report & pay both.
Same with Sales & Use Taxes if you buy/order something from another state within the union, even if something for personal use.
Anything else is known as Tax Evasion.

 

I recently got an email from a restoration shop I used in the past warning current customers about several things. Among them, 1) the significant increase in parts prices due to tariffs, 2) significantly delayed shipping schedules resulting in extended project deadlines 3) new unwillingness from foreign suppliers to sell to U.S. clients due to the extra hassle and complaints about extra shipping costs.

I suspect that there's much nail-biting around Pebble Beach entries this year. What will be finished on time and what will remain on the shop floor this August?

 

I don't understand. I live in the Balkans (Not EU) and have imported two cars from Germany. (Not over 25 years old.) On Mobile.de almost all of the cars include VaT in their price and they refer to that as "Brutto" meaning Gross. As soon as I tell them I am taking the car out of Germany they tell me the net price which excludes VaT. Many of the listings actually include the percentage amount, 19% of the Gross I think.

So as I understood it, local Germans had to pay that Gross price with VaT. Am I wrong?

 

those brutto/netto prices are only from dealers, if a private sells his car there is no VaT

 

So if a German buys a used car from a private German citizen there is no VaT, but if he buys it from a dealer he pays VaT?

This is the type of ad I see all the time:

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yes

only if the car belongs to the dealer

but may be the car is not sold directly from the dealer and it is not his own car ( so he is selling the vehicle on behalf of a private individual ) then the price is also without the VaT. but this from the CPS GmbH in königswinter is 100 % not a private sale because the sales price is 78.540 € ( this is brutto ) and the netto price is 66.000 €. the VaT in germany is 19 %. this netto price only pays a buyer when he lives outside the EU.

this car in the example now is offered from a german dealer in the dealers name. there are several options for selling:
1. a private guy in germany will buy it -then this one has to pay the VaT
2. a business guy in germany will buy it - then this one also has to pay the VaT, but will get it back from the government when he declares his tax
3. a private guy within the EU will buy it - he has to pay the german VaT
4. a business guy in the EU with a EU-VaT number buy it - he has the option to pay the germany VaT ( but will not get it back in his country ) or pays the VaT in his country but also if for his business will get it back in his country with his tax declaration
5. the car will leave the EU - no VAT, but have to pay the VaT first at the dealer and when the dealer has the confirmation from the carrier that the car left EU then the dealer pays back the VaT. if the dealer works together with a carrier and they trust each other then mostly the VaT is not paid. but if something goes wrong the dealer is responsible for the VaT.
no. 3 and 4 is only valid for used cars, not for new cars. a new car is defined as follows: max. 6000 km and max. 6 month old after first registration. for this "new" car the VaT has to be payed in the country of registration